New Tax Regime calculation: How much you can save on income of ₹16 lakh, ₹20 lakh, ₹24 lakh, ₹50 lakh after slab change

Finance Minister Nirmala Sitharaman has proposed to revised the New Tax Regime slabs and rates for the benefit of the middle-class taxpayers.

The new slabs and rates will apply from Financial Year 2025-26 (AY 2026-27).

"I am now happy to announce that there will be no income tax payable up to income of ₹12 lakh under the new regime. This limit will be ₹12.75 lakh for salaried taxpayers, due to standard deduction of ₹ 75,000," the FM said.

As per the budget proposal, an average income of ₹1 lakh per month other than special rate income such as capital gains will become tax-free.

"Slabs and rates are being changed across the board to benefit all taxpayers. The new structure will substantially reduce the taxes of the middle class and leave more money in their hands, boosting household consumption, savings and investment," she said.

Proposed tax slabs and rates in the new regime

How will the new slabs and rates benefit taxpayers

As per the finance minister, for taxpayers having up to ₹12 lakh of normal income, tax rebate will be increased along with slab rate reduction. Combined, both will ensure that there is no tax on income up to ₹12 lakh.

Normal income means incomes other than special rate income such as capital gains. So this could include income from salary, pension, and bank deposits.

How will new slabs benefit taxpayers at different income levels

According to the finance minister, a taxpayer in the new regime with an income of ₹12 lakh will get a benefit of ₹80,000 in tax (which is 100% of tax payable as per existing rates).

Similarly, a person having an income of ₹18 lakh will get a benefit of ₹70,000 in tax. Currently, they pay 30% tax. A person with an income of ₹25 lakh will get a benefit of ₹1,10,000.

Let's look at some more examples:

Tax-saving on ₹16 lakh income

With the proposed changes, you can save up to ₹50,000 compared to previous slab/rates. Total tax after the rebate announced in Budget 2025 will be ₹1.2 lakh. Previously, this was ₹1.7 lakh.

Tax-saving on ₹20 lakh income

You can save up to ₹90,000 compared to previous slab/rates. Total tax after the rebate announced in Budget 2025 will be ₹2 lakh. Previously, it was ₹2.9 lakh

Tax-saving ₹24 lakh income

You can save up to ₹1.1 lakh. Total tax after the proposed rebate in Budget 2025 will be ₹3 lakh. Previously, the net tax payable was approx ₹4,02,999.

Tax-saving ₹50 lakh income

You can save up to ₹1.1 lakh. Total tax after the rebate announced in Budget 2025 will be ₹10.8 lakh. The tax payable previously was ₹11.9 lakh under new tax regime.

Tax-saving in New tax Regime due to proposed slabs

Source: Budget Speech 2025

Please note this article is based on the announcement made by the Finance Minister in Budget 2025. It may need some revision based on finer details of the budget proposal.